What changed in this filing

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Item 1. Business

2022-03-10 compared with 2021-03-08 · 769 added, 699 removed, 113 unchanged (93% of the section changed)

business specializes in the development, production and sale of innovative medications that offer unique competitive advantages

and serve unmet needs in the marketplace through our subsidiaries and deconsolidated companies.

We own and operate one of the

nation’s leading ophthalmic pharmaceutical businesses, ImprimisRx.

In addition to wholly owning ImprimisRx, we also have

non-controlling equity positions in Eton Pharmaceuticals, Inc.

(“Eton”), Surface Ophthalmics, Inc.

and Melt Pharmaceuticals, Inc.

(“Melt”), all companies that began as subsidiaries of Harrow.

We also recently launched

a new business called Visionology and are exploring opportunities to launch other subsidiaries.

We own royalty rights in various

drug candidates being developed by Surface and Melt.

We intend to continue to create and hold equity and royalty rights in new

businesses that commercialize drug candidates that are internally developed or otherwise acquired or licensed from third parties.

is our ophthalmic focused prescription pharmaceutical business.

We offer to over 9,000 physician customers and their patients

medically necessary prescription drugs to meet their needs that are otherwise unmet by commercially available drugs.

formulations available at prices that are, in most cases, lower than non-customized commercial drugs.

Our current ophthalmic formulary

includes over twenty compounded formulations, many of which are patented or patent-pending, and are customizable for the specific

needs of a patient.

Some examples of our compounded medications are various combinations of drugs formulated into one bottle and

numerous preservative-free formulations.

Depending on the formulation, the regulations of a specific state, and ultimately the

needs of the patient, ImprimisRx products may be dispensed as patient-specific medications from our 503A pharmacy, or for in-office

use, made according to federal current good manufacturing practices (or cGMPs) or other FDA guidance documents, in our FDA-registered

New Jersey Outsourcing Facility (“NJOF”).

August 1, 2020, ImprimisRx entered into a Commercial Alliance Agreement (the “Dexycu Agreement”) with Eyepoint Pharmaceuticals,

(“Eyepoint”), pursuant to which Eyepoint granted ImprimisRx the non-exclusive right to co-promote DEXYCU ®

(dexamethasone intraocular suspension) 9% for the treatment of post-operative inflammation following ocular surgery in the

United States.

Pursuant to the Dexycu

Agreement , Eyepoint pays ImprimisRx a fee that is calculated based on the

quarterly sales of DEXCYU in excess of predefined volumes to specific customers of ImprimisRx

expect to acquire and/or develop additional FDA-approved ophthalmic drugs that allow us to leverage the commercial infrastructure

of ImprimisRx to promote, sell, and ultimately bring these products to market.

is a membership-based online eye health and medication platform.

Visionology leverages our experience in the ophthalmic pharmaceutical

business, our relationships with eyecare professionals across the United States, and our expertise in developing and deploying

telemedicine software.

We recently launched a proof-of-concept for Visionology in certain states in the southeast area of the

If successful, we expect Visionology will expand access to its service later in 2021.

are an ophthalmic-focused healthcare company.

Our business specializes in the development, production and sale of innovative medications

that offer unique competitive advantages and serve unmet needs in the marketplace through our subsidiaries and deconsolidated companies.

We own and operate ImprimisRx, one of the nation’s leading ophthalmology-focused pharmaceutical businesses, and Visionology, Inc.

(“Visionology”), a direct-to-consumer eyecare subsidiary focused on chronic vision care.

In addition, we also have non-controlling

equity positions in Surface Ophthalmics, Inc.

(“Surface”) and Melt Pharmaceuticals, Inc.

(“Melt”), both companies

that began as subsidiaries of Harrow and were subsequently deconsolidated.

We also own royalty rights in various drug candidates being

developed by Surface and Melt.

is our ophthalmology-focused prescription pharmaceutical business.

From its inception in 2014, ImprimisRx, whose business consists of

integrated research and development, production, dispensing/distribution, sales, marketing, and customer-service capabilities, has offered

physician customers and their patients access to critical medicines to meet their clinical needs.

Initially, ImprimisRx focused exclusively

on compounded medications to serve needs unmet by commercially available drugs.

We make our formulations available at prices that are,

in most cases, lower than non-customized commercial drugs, ImprimisRx’s customer base has grown to include more than 10,000 U.S.

eyecare-dedicated prescribers and institutions.

Our current ophthalmology formulary includes over 20 compounded formulations, many of

which are patented or patent-pending, and are customizable for the specific needs of a patient.

Our compounded medications include various

combinations of drugs formulated into one bottle and numerous preservative free formulations.

Depending on the formulation, the regulations

of a specific state and ultimately the needs of the patient, ImprimisRx products may be dispensed as patient-specific medications from

our 503A pharmacy, or for in-office use, made according to current good manufacturing practices (“cGMPs”) or other guidance

documents from the U.S.

Food and Drug Administration (the “FDA”), in our FDA-registered New Jersey outsourcing facility.

the past two years, in order to more fully serve the needs of our growing customer base, we have invested in broadening ImprimisRx’s

product portfolio to include FDA-approved products.

Our investments in this regard have led to commercial partnerships to sell DEXYCU®

(“Dexycu”) and Avenova, the acquisition of two later stage drug candidates, and the recent acquisition of U.S.

to four FDA-approved ophthalmic products.

These transactions, and those we are continuing to pursue, are focused in eyecare pharmaceuticals.

We believe that our continued investments in these and other products will enable us to provide more physician prescribers and their

patients with access to a complete portfolio of affordable eyecare pharmaceuticals to address their clinical needs.

entered into a Commercial Alliance Agreement (the “Dexycu Agreement”) with Eyepoint Pharmaceuticals, Inc.

(“Eyepoint”),

pursuant to which Eyepoint granted ImprimisRx the right to promote DEXYCU® (dexamethasone intraocular suspension) 9% for the treatment

of post-operative inflammation following ocular surgery in the United States.

Pursuant to the Dexycu Agreement, Eyepoint pays ImprimisRx

a fee that is calculated based on the quarterly sales of Dexycu in the U.S.

MAXITROL® EYE DROPS, MOXEZA®

December 2021, we entered into an Asset Purchase Agreement (the “NVS Agreement”) with Novartis Technology, LLC and Novartis

Ophthalmics AG (together, “NVS”), pursuant to which we acquired U.S.

commercial rights to four FDA-approved ophthalmic medicines:

1% (apraclonidine hydrochloride) is indicated to control or prevent post-surgical elevations in intraocular pressure (IOP) that occur

in patients after argon laser trabeculoplasty, argon laser iriodotomy or Nd:YAG posterior capsulotomy;

0.5% (apraclonidine hydrochloride) is for short-term adjunctive therapy in patients on maximally tolerated medical therapy

who require additional IOP reduction;

(neomycin/polymyxin B/dexamethasone) is an eye drop used to treat steroid-responsive inflammatory ocular conditions where bacterial

infection or a risk of bacterial ocular infection exists;

0.5% (moxifloxacin hydrochloride) is a topical fluoroquinolone anti-infective eye drop used to treat bacterial conjunctivitis.

to the NVS Agreement, NVS will continue to sell the products and transfer the net profit to us for a transitional period of approximately

six months after the date of execution.

Following the transition period, we expect to have the products manufactured by third parties

and commercialize the products for the U.S.

believe by expanding our product portfolio to include these branded FDA-approved products, we will be positioned to leverage our ImprimisRx

platform to introduce unique lifecycle management strategies that could grow sales and address needs of our customers that we are unable

to meet with our other compounded product offerings.

July 2021, we acquired the exclusive marketing and supply rights to AMP-100 in the U.S.

and Canada from Sintetica S.A.

(“Sintetica”).

AMP-100 is a patented, ophthalmic topical anesthetic drug candidate.

If FDA-approved, the active ingredient used in AMP-100 will be the

first approved use of this active ingredient in the U.S.

ophthalmic market.

safety and efficacy of AMP-100 were evaluated in various clinical trials, including a Phase 2/3 randomized, double-masked, vehicle-controlled,

efficacy, safety and tolerability study in healthy volunteers and a non-inferiority Phase 3 study of 342 patients undergoing cataract

surgeries, comparing AMP-100 to an active comparator.

Ultimately, these studies demonstrated:

is generally well tolerated, and the most common adverse event was mydriasis (dilation of pupil) in about 20% of patients,;

has similar onset of action and met the primary endpoint of a Phase 3 non-inferiority study comparing AMP-100 to

an active control (Phase 3);

success of patients receiving AMP-100 was 95% vs.

20% with placebo (Phase 2/3 study) and;

has been shown to have predictable offset (end of anesthesia) within a narrow bell curve (i.e.

no wide variance).

new drug application (“NDA”) for AMP-100 was submitted by Sintetica to the FDA in the fourth quarter of 2021 and the FDA

has assigned the application standard review and a Prescription Drug User Fee Act (PDUFA) target action date of October 16, 2022.

approved, we expect our initial commercial focus of AMP-100 to be on ophthalmic procedures that traditionally require the eye to be anesthetized.

is protected by one issued patent and another patent-pending.

The issued patent includes composition of matter and method of use claims

and could provide protection for AMP-100 into 2037.

August 2021, we acquired exclusive marketing rights to MAQ-100 in the U.S.

and Canada from Wakamoto Pharmaceutical Co., Ltd.

(“Wakamoto”).

MAQ-100 is a preservative-free triamcinolone acetonide ophthalmic injection drug candidate.

MAQ-100 is marketed and sold by Wakamoto

in Japan as MaQaid®.

Following Japan’s Ministry of Health Labor and Welfare (“MHLW”) approval, MaQaid was launched

in Japan in 2010, indicated as an intravitreal injection for visualization for vitrectomy.

Since its initial MHLW approval, the indication

for MaQaid was expanded to include (a) treatments for alleviation of diabetic macular edema, (b) macular edema associated with retinal

vein occlusion (or RVO), and (c) non-infectious uveitis.

We intend to leverage the clinical data used for Japanese market approval of

MaQaid to support a clinical program and U.S.

market NDA submission of MAQ-100 for visualization during vitrectomy.

We intend to request

a meeting with FDA during the first half of 2022 to discuss our planned clinical program for MAQ-100.

expect to acquire and/or develop additional FDA-approved/approvable ophthalmic products and product candidates that will allow us to

leverage the commercial infrastructure of ImprimisRx to promote, sell, and ultimately bring these products to market.

a direct-to-consumer online eye health platform, leverages our experience in the ophthalmic pharmaceutical business as well as our relationships

with eyecare professionals across the United States.

We recently launched a proof-of-concept model for Visionology within certain U.S.

markets, and if successful, expect to expand the launch on a nationwide basis in 2022.

Ophthalmology

any ocular procedure, a surgeon may require drugs for sedation, dilation, and inflammation and infection prevention.

surgery market continues to experience significant growth.

According to Market Scope, approximately 4.2 million cataract surgeries

were performed in the U.S.

any ocular procedure, a surgeon may require drugs for sedation, dilation, inflammation and infection prevention, and ocular surface preservation.

The cataract surgery market continues to experience significant growth.

According to Market Scope , approximately 4.2 million cataract

surgeries were performed in the U.S.

The National Eye Institute estimates that over 24 million Americans currently have cataracts

and that this number will grow to 38 million by 2030 and reach more than 50 million by 2050.

In addition, the American Academy

of Ophthalmology (AAO) estimates that over one-half of Americans require some form of vision correction and 43 million of these

individuals are candidates for refractive surgery.

Nearly 96 percent of the refractive surgery procedures performed are LASIK

(laser in situ keratomileusis) surgeries, an outpatient surgical procedure used to treat nearsightedness, farsightedness, and

According to Statista, an estimated 600,000 LASIK procedures were performed in the U.S.

In addition, the American Academy of Ophthalmology

(AAO) estimates that over one-half of Americans require some form of vision correction and 43 million of these individuals are candidates

for refractive surgery.

Nearly 96 percent of the refractive surgery procedures performed are LASIK (laser in situ keratomileusis) surgeries,

an outpatient surgical procedure used to treat nearsightedness, farsightedness, and astigmatism.

According to Statista, an estimated

600,000 LASIK procedures were performed in the U.S.

to the Glaucoma Research Foundation, there are over 3 million Americans with glaucoma but only half are aware they have it.

glaucoma (the most common type of glaucoma) is a condition of increased intraocular pressure that causes gradual loss of sight.

Glaucoma is incurable, and if not managed can lead to blindness.

Generally, the first line of treatment consists of a prostaglandin

analogue (PGA) eye drop regimen.

is incurable, and if not managed, can lead to blindness.

Generally, the first line of treatment consists of a prostaglandin analogue

(PGA) eye drop regimen.

As the disease progresses, non-PGA products are generally added as a second line treatment.

agents, other than PGAs, include beta blockers, alpha agonists, miotics and steroids.

According to a 2013 article in Glaucoma

Today , up to 50 percent of glaucoma patients require more than one drug following a few months of initial treatment and there

is a direct correlation between the number of glaucoma bottles and decreased adherence;

however, the FDA has yet to approve a

PGA combination product despite combination products including a PGA (Xalacom ® , DuoTrav ® and Ganfort ® )

available outside of the U.S.

According to a 2017 Market Scope report, the glaucoma pharmaceuticals market is expected to reach

$5.3 billion in 2022.

eye occurs when the eye does not produce enough tears, or when the tears are not of the correct consistency and evaporate too

Topical agents, other

than PGAs, include beta blockers, alpha agonists, miotics and steroids.

According to a 2013 article in Glaucoma Today , up to 50%

of glaucoma patients require more than one drug following a few months of initial treatment and there is a direct correlation between

the number of glaucoma bottles and decreased adherence;

however, the FDA has yet to approve a PGA combination product despite combination

products including a PGA (Xalacom ® , DuoTrav ® and Ganfort ® ) available outside of the U.S.

According to a 2017 Market Scope report, the glaucoma pharmaceuticals market is expected to reach $5.3 billion in 2022.

eye occurs when the eye does not produce enough tears, or when the tears are not of the correct consistency and evaporate too quickly.

Inflammation of the surface of the eye may also occur.

We believe that dry eye disease, or DED, affects over 30 million

people in the U.S., and a major epidemiological study, the Beaver Dam Offspring Study, published in 2014 in the American Journal

of Ophthalmology, reported that in a cohort of over 3,000 patients, DED was self-reported by 14.5% of the patients.

to a 2017 Market Scope report, the global dry eye treatments market is expected to grow from $3.7 billion in 2017 to $4.9 billion

Dry eye is among the most common conditions seen by eye care professionals.

We believe that dry eye disease (“DED”) affects over 30 million people

in the U.S., and a major epidemiological study, the Beaver Dam Offspring Study, published in 2014 in the American Journal of Ophthalmology ,

reported that in a cohort of over 3,000 patients, DED was self-reported by 14.5% of the patients.

According to a 2017 Market Scope

report, the global dry eye treatments market is expected to grow from $3.7 billion in 2017 to $4.9 billion in 2022.

Dry eye is among

the most common conditions seen by eyecare professionals.

is the normal loss of near focusing ability that occurs with age.

Most people begin to notice the effects of presbyopia sometime

after age 40, when they start having trouble seeing small print clearly.

According to an American Academy of Ophthalmology report

from 2018, there are an estimated 1.8 billion people worldwide who suffer from presbyopia, with eye glasses (more commonly referred

to as “readers”) being the most common treatment option.

Based on our understanding, there are currently four eyedrops

undergoing clinical trials/development in the U.S.

aiming to be first to market topical eye drops to treat the symptoms associated

with presbyopia.

We believe most of these are designed to enhance depth of field via a “pinhole effect” and in one

case to reduce lens stiffening;

and some of these medications could be synergistic with each other or combined with refractive

surgery to enhance outcomes.

However, as of the date of this Annual Report, none of these drug candidates has received market

approval from the FDA.

Most people begin to notice the effects of presbyopia sometime after

age 40, when they start having trouble seeing small print clearly.

According to an American Academy of Ophthalmology report from

2018, there are an estimated 1.8 billion people worldwide who suffer from presbyopia, with eye glasses (more commonly referred to as

“readers”) being the most common treatment option.

Based on our understanding, there are currently four eyedrops undergoing

clinical trials/development in the U.S.

aiming to be first to market topical eye drops to treat the symptoms associated with presbyopia.

We believe most of these are designed to enhance depth of field via a “pinhole effect” and in one case to reduce lens stiffening;

and some of these medications could be synergistic with each other or combined with refractive surgery to enhance outcomes.

as of the date of this Annual Report, none of these drug candidates has received market approval from the FDA.

Pharmaceutical

2 unchanged sentences

Pharmaceutical

compounding is the science of combining different active pharmaceutical ingredients (APIs), all of which are approved by the FDA

(either as a finished form product or as a bulk drug ingredient), and excipients to create specialized pharmaceutical preparations.

Physicians and healthcare institutions use compounded drugs when commercially available drugs do not optimally treat a patient’s

medical needs.

In many cases, compounded drugs, such as ours, have wide market utility and may be clinically appropriate for large

patient populations.

Examples of compounded formulations include medications with alternative dosage strengths or unique dosage

forms, such as topical creams or gels, suspensions, or solutions with more tolerable drug delivery vehicles.

all of our sales revenue is derived from making, selling and dispensing our compounded prescription drug formulations as cash

pay transactions between us and our end-user customer.

As such, the majority of our commercial transactions do not involve distributors,

wholesalers, insurance companies, pharmacy benefit managers or other middle parties.

By not being reliant on insurance company

formulary inclusion and pharmacy benefit manager payment clawbacks, we are able to simplify the prescription transaction process.

We believe the outcome of our business model is a simple and transparent transaction, involving a patient-in-need, a physician’s

diagnosis, a fair price and great service for a quality pharmaceutical product.

We sell our products through a network of employees

and independent contractors, and we dispense our formulations in all 50 states, Puerto Rico and in selected markets outside the

United States.

compounding is the science of combining different active pharmaceutical ingredients (APIs), all of which are approved by the FDA (either

as a finished form product or as a bulk drug ingredient), and excipients to create specialized pharmaceutical preparations.

and healthcare institutions use compounded drugs when commercially available drugs do not optimally treat a patient’s needs.

many cases, compounded drugs, such as ours, have wide market utility and may be clinically appropriate for large patient populations.

Examples of compounded formulations include medications with alternative dosage strengths or unique dosage forms, such as topical creams

or gels, suspensions, or solutions with more tolerable drug delivery vehicles.

all of our sales revenue is derived from making, selling and dispensing our compounded prescription drug formulations as cash pay transactions

between us and our end-user customer.

As such, the majority of our commercial transactions do not involve distributors, wholesalers,

insurance companies, pharmacy benefit managers or other middle parties.

By not being reliant on insurance company formulary inclusion

and pharmacy benefit manager payment clawbacks, we are able to simplify the prescription transaction process.

We believe the outcome

of our business model is a simple transaction, involving a patient-in-need, a physician’s diagnosis, a fair price and great service

for a quality pharmaceutical product.

We sell our products through a network of employees and independent contractors, and we dispense

our formulations in all 50 states, Puerto Rico and in select markets outside the United States.

Compounding Facilities

1 unchanged sentence

compounding businesses are governed by Sections 503A and 503B of the Federal Food Drug and Cosmetic Act (the “FDCA”).

Section 503A of the FDCA provides that a pharmacy is only permitted to compound a drug for an individually identified patient

based on a prescription for a patient and is only permitted to distribute the drug interstate if the pharmacy is licensed to do

so in the states where it is compounded and where the medication is received.

503A of the FDCA provides that a pharmacy is only permitted to compound a drug for an individually identified patient based on a prescription

for the patient and is only permitted to distribute the drug interstate if the pharmacy is licensed to do so in the states where it is

compounded and where the medication is received.

503B of the FDCA provides that a pharmacy engaged in preparing sterile compounded drug formulations may voluntarily elect to register

as an “outsourcing facility.” Outsourcing facilities are permitted to compound large quantities of drugs without a

prescription and distribute them out of state with certain limitations such as the formulation appearing on the FDA’s drug

shortage list or the bulk drug substances contained in the formulations appearing on the FDA’s “clinical need”

Entities voluntarily registering with FDA as outsourcing facilities are subject to additional requirements that do not apply

to compounding pharmacies (operating under Section 503A of the FDCA), including adhering to standards such as current good manufacturing

practices (cGMP) or other FDA guidance documents and being subject to regular FDA inspection.

as an “outsourcing facility.” Outsourcing facilities are permitted to compound large quantities of drugs without a prescription

and distribute them out of state with certain limitations, such as the formulation appearing on the FDA’s drug shortage list or

the bulk drug substances contained in the formulations appearing on the FDA’s “clinical need” list.

Entities voluntarily

registering with FDA as outsourcing facilities are subject to additional requirements that do not apply to compounding pharmacies (operating

under Section 503A of the FDCA), including adhering to standards such cGMPs or other FDA guidance documents and being subject to regular

FDA inspection.

operate two compounding facilities located in Ledgewood, New Jersey.

Our New Jersey operations are comprised of two separate entities

and facilities, one of which is registered with the FDA as an outsourcing facility under Section 503B of the FDCA.

The other New

Jersey facility (“RxNJ”) is a licensed pharmacy operating under Section 503A of the FDCA.

All products that we sell,

produce and dispense are made in the United States.

and facilities, one of which is registered with the FDA as an outsourcing facility (“NJOF”) under Section 503B of the FDCA.

The other New Jersey facility (“RxNJ”) is a licensed pharmacy operating under Section 503A of the FDCA.

All products that

we sell, produce and dispense are made in the United States.

believe that, with our current compounding pharmacy facilities and licenses and FDA registration of NJOF, we have the infrastructure

1 unchanged sentence

We plan to invest in one or both of our facilities to further their capacity and efficiencies.

Also, we may seek to access greater

pharmacy, production related redundancy, and distribution through acquisitions, partnerships or other strategic transactions.

Pharmaceutical

Development Businesses

have ownership interests in Eton, Surface and Melt and hold royalty interests in some of Surface’s and Melt’s drug

These companies are pursuing market approval for their drug candidates under the FDCA, including in some instances

under the abbreviated pathway described in Section 505(b)(2) which permits the submission of a new drug application (“NDA”)

where at least some of the information required for approval comes from studies not conducted by or for the applicant and for

which the applicant has not obtained a right of reference.

In 2018 and 2019, we formed and created subsidiaries named Radley Pharmaceuticals,

(“Radley”), Mayfield Pharmaceuticals, Inc.

Also, we may seek to access greater pharmacy

and production related redundancy and markets through acquisitions, partnerships or other strategic transactions.

Businesses (De-Consolidated Businesses)

have ownership interests in Surface, Melt, and Eton Pharmaceuticals, Inc.

(“Eton”) and hold royalty interests in some of

Surface’s and Melt’s drug candidates.

These companies are pursuing market approval for their drug candidates under the FDCA,

including in some instances under the abbreviated pathway described in Section 505(b)(2), which permits the submission of a NDA where

at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant

has not obtained a right of reference.

2018 and 2019, we formed and created subsidiaries named Radley Pharmaceuticals, Inc.

(“Radley”), Mayfield Pharmaceuticals,

(“Mayfield”), and Stowe Pharmaceuticals, Inc.

In addition, we may create additional subsidiaries that will be focused on the development and FDA approval of certain proprietary

drug formulations that we currently own, will in-license/acquire and/or otherwise develop.

We expect any new subsidiaries to be

focused on eye care.

De-Consolidated

Businesses (Noncontrolling Equity Interests)

In 2020, we halted nearly all operating activities

related to these subsidiaries to invest resources in other areas, and we may not restart any or all activities related to these businesses.

In addition, we terminated license and acquisition agreements for Mayfield’s MAY-66 and MAY-44 drug candidates, and Stowe’s

STE-006 drug candidate.

Noncontrolling

Equity Interests

Ophthalmics, Inc.

is a clinical-stage pharmaceutical company focused on development and commercialization of innovative therapeutics for ocular

surface diseases.

is a clinical-stage pharmaceutical company focused on development and commercialization of innovative therapeutics for ocular surface

January 2021, Surface announced positive top-line results from a Phase 2 trial of its drug candidate SURF-201, a 0.2% betamethasone,

preservative-free ophthalmic solution in the Klarity delivery vehicle for the treatment of post cataract surgery pain and inflammation.

According to the Surface results, SURF-201 was dosed twice daily, met its primary endpoints of absence of inflammation at both

Day 8 and Day 15 and was found to be safe and well-tolerated by the patient group.

In addition, a secondary endpoint showed almost

90% of patients given SURF-201 were pain free at Day 15.

SURF-201 marks the first ophthalmic therapeutic in the United States

to utilize betamethasone as well as being the first preservative-free unit dose therapy for the treatment of post-operative pain

and inflammation.

According to the Surface results, SURF-201 was dosed twice daily, met its primary endpoints of absence of inflammation at both Day 8

and Day 15 and was found to be safe and well-tolerated by the patient group.

In addition, a secondary endpoint showed almost 90% of patients

given SURF-201 were pain free at Day 15.

SURF-201 marks the first ophthalmic therapeutic in the United States to utilize betamethasone

and the first preservative-free unit dose therapy for the treatment of post-operative pain and inflammation.

in January 2021, Surface announced the first patient dosed in a head-to-head Phase 2 trial for its drug candidate SURF-100 (mycophenolate

sodium and betamethasone in Klarity vehicle) for the treatment of chronic dry eye disease.

The head-to-head study will compare

SURF-100 against leading on-market competitors lifitegrast ophthalmic solution 5% (marketed as Xiidra®) and cyclosporine ophthalmic

emulsion 0.05% (marketed as Restasis®).

February 2021, Surface announced the first patient dosed in a phase 2 trial for its drug candidate SURF-200 (betamethasone in

Klarity vehicle) for the treatment of episodic dry eye flares.

The dose ranging study for SURF-200 will be administered in two

different low concentration formulations of betamethasone in the Klarity vehicle.

The trial will enroll 120 to 140 patients with

a primary endpoint of Symptom Improvement of one unit based on the University of North Carolina Dry Eye Management Scale by the

2018, Surface closed on an offering of its Series A Preferred Stock.

At that time, we lost our controlling interest and deconsolidated

Surface from our consolidated financial statements.

We own 3,500,000 shares of Surface, which was approximately 30% of the equity

and voting interests as of December 31, 2020.

Harrow owns mid-single digit royalty rights on net sales of SURF-100, SURF-200 and

We expect Surface to complete another round of financing within the next twelve months.

The head-to-head study will compare SURF-100

against leading on-market competitors lifitegrast ophthalmic solution 5% (marketed as Xiidra®) and cyclosporine ophthalmic emulsion

0.05% (marketed as Restasis®).

February 2021, Surface announced the first patient dosed in a Phase 2 trial for its drug candidate SURF-200 (betamethasone in Klarity

vehicle) for the treatment of episodic dry eye flares.

The dose ranging study for SURF-200 will be administered in two different low

concentration formulations of betamethasone in the Klarity vehicle.

The trial will enroll 120 to 140 patients with a primary endpoint

of Symptom Improvement of one unit based on the University of North Carolina Dry Eye Management Scale by the eighth day.

2018, Surface closed an offering of its Series A Preferred Stock.

At that time, we lost our controlling interest and deconsolidated Surface

from our consolidated financial statements.

During May, June and July of 2021, Surface closed an offering of its preferred stock at a

purchase price of $4.50 per share resulting in gross proceeds to Surface of approximately $25,000,000 (the “Surface Series B Offering”).

We own 3,500,000 shares of Surface common stock, which is approximately 20% of the equity and voting interests as of December 31, 2021.

Harrow owns mid-single digit royalty rights on net sales of SURF-100, SURF-200 and SURF-201.

Pharmaceuticals, Inc.

1 unchanged sentence

and anesthesia therapeutics for human medical procedures in hospital, outpatient, and in-office settings.

Melt intends to seek

regulatory approval for its proprietary technologies, where possible.

In December 2018, we entered into an Asset Purchase Agreement

with Melt (the “Melt Asset Purchase Agreement”), and Harrow assigned to Melt the underlying intellectual property

for Melt’s current pipeline, including its lead drug candidate MELT-100.

The core intellectual property Melt owns is a patented

series of combination non-opioid sedation drug formulations that we estimate to have multitudinous applications.

Melt intends to seek regulatory

approval for its proprietary technologies, where possible.

In December 2018, we entered into an Asset Purchase Agreement with Melt (the

“Melt Asset Purchase Agreement”), pursuant to which Harrow assigned to Melt the underlying intellectual property for Melt’s

current pipeline, including its lead drug candidate MELT-300.

The core intellectual property Melt owns is a patented series of combination

non-opioid sedation drug formulations that we estimate to have multitudinous applications.

is a novel, sublingually delivered, non-IV, opioid-free drug candidate being developed for procedural sedation.

Melt filed an

investigational new drug application (“IND”) with the FDA in June 2020 and began its clinical program for MELT-100.

In February 2021, Melt announced data from, and the successful completion of, its phase 1 study.

Melt expects to begin its phase

2 study for MELT-100 in the second half of 2021.

Melt filed an investigational

new drug application (“IND”) with the FDA in June 2020 and began its clinical program for MELT-300.

In February 2021, Melt

announced data from, and the successful completion of, its Phase 1 study.

Melt recently began enrolling patients in its Phase 2 study

for MELT-300.

January 2019, Melt closed an offering of its Series A Preferred Stock.

1 unchanged sentence

Melt from our consolidated financial statements.

We own 3,500,000 shares of Melt common stock, which was approximately 44% of

the equity and voting interests issued and outstanding as of December 31, 2020.

We expect Melt to complete another round of financing

within the next twelve months.

Pursuant to the terms of the Melt Asset Purchase Agreement, Melt is required to make mid-single

digit royalty payments to the Company on net sales of MELT-100, while any patent rights remain outstanding, subject to other conditions.

Melt can require the Company to cease compounding like products at the time of FDA approval of MELT-100.

If approved, we do not

expect a cessation of compounding like products to have a material impact on our operations and financial performance.

We own 3,500,000 shares of Melt common stock, which was approximately 46% of the equity

and voting interests issued and outstanding as of December

In September 2021, we provided Melt with a senior secured loan in the amount of $13,500,000,

which is intended to fund the Phase 2 program of MELT-300.

In connection with the loan, we also were provided the right, but not the

obligation, to match any offer received by Melt associated with the commercial rights to any of its drug candidates for a period of five

Melt is required to make mid-single digit royalty payments to the Company on net sales of MELT-300, while any patent rights remain

outstanding, subject to other conditions.

Melt can require the Company to cease compounding like products at the time of FDA approval

If approved, we do not expect a cessation of compounding like products to have a material impact on our operations and financial

Pharmaceuticals, Inc.

is a commercial-stage pharmaceutical company focused on developing and commercializing innovative drug products.

includes several products and drug candidates in various stages of development across a variety of dosage forms.

Eton closed an offering of its Series A Preferred Stock.

At that time, we gave up our controlling interest and deconsolidated

Eton from our consolidated financial statements.

In November 2019, Eton completed an initial public offering of its common stock.

We own 3,500,000 shares of Eton common stock, which was less than 20% of the equity and voting interests issued and outstanding

as of December 31, 2020.

Businesses (Controlling Equity Interests)

Stowe and Radley are consolidated subsidiaries of Harrow.

Mayfield is a development-stage pharmaceutical company focused on developing

urology related drug candidates.

Stowe is focused on the development of proprietary ophthalmic drug candidates.

Radley is a development-stage

pharmaceutical company that has been focused on the development of proprietary drug candidates focused on rare diseases.

Recently, we discontinued nearly all of the activities related to Mayfield, Stowe and

Radley, and may not resume those activities in the near term.

control over 50% of the equity and voting interests issued and outstanding of Mayfield, Stowe and Radley as of the date of this

Annual Report.

505(b)(2) New Drug Applications

an alternate path for FDA approval of new indications or new formulations of previously-approved products, a company may file

a Section 505(b)(2) NDA instead of a “stand-alone” or “full” NDA.

Section 505(b)(2) of the FDCA was enacted

as part of the Drug Price Competition and Patent Term Restoration Act of 1984, otherwise known as the Hatch-Waxman Amendments.

Section 505(b)(2) permits the submission of an NDA where at least some of the information required for approval comes from studies

not conducted by or for the applicant and for which the applicant has not obtained a right of reference.

Some examples of products

that may be allowed to follow a 505(b)(2) path to approval are drugs that have a new dosage form, strength, route of administration,

formulation or indication.

Hatch-Waxman Amendments permit the applicant to rely upon certain published nonclinical or clinical studies conducted for an approved

product or the FDA’s conclusions from prior review of such studies.

The FDA may require companies to perform additional

studies or measurements to support any changes from the approved product.

The FDA may then approve the new product for all or

some of the labeled indications for which the reference product has been approved, as well as for any new indication supported

by the Section 505(b)(2) application.

While references to nonclinical and clinical data not generated by the applicant or for

which the applicant does not have a right of reference are allowed, all development, process, stability, qualification and validation

data related to the manufacturing and quality of the new product must be included in an NDA submitted under Section 505(b)(2).

the extent that the Section 505(b)(2) applicant is relying on the FDA’s conclusions regarding studies conducted for an already

approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the

FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, or Orange Book.

Specifically, the applicant must

certify that:

(i) the required patent information has not been filed;

(ii) the listed patent has expired;

(iii) the listed patent

has not expired, but will expire on a particular date and approval is sought after patent expiration;

or (iv) the listed patent

is invalid or will not be infringed by the new product.

The Section 505(b)(2) application also will not be approved until any

non-patent exclusivity, such as exclusivity for obtaining approval of a new chemical entity, listed in the Orange Book for the

reference product has expired.

Thus, the Section 505(b)(2) applicant may invest a significant amount of time and expense in the

development of its products only to be subject to significant delay and patent litigation before its products may be commercialized.

Its pipeline includes

several products and drug candidates in various stages of development across a variety of dosage forms.

In May 2017, Eton closed an offering

of its Series A Preferred Stock, as a result of which we gave up our controlling interest in it.

In November 2018, Eton completed an

initial public offering of its common stock.

We own 1,982,000 shares of Eton common stock, which is less than 10% of Eton’s equity

and voting interests issued and outstanding as of December 31, 2021.

and Marketing

focus of our sales and marketing is in the United States.

We do, however, believe that our proprietary drug formulations could

have commercial appeal in international markets, and we have engaged distributors and entered into out-licensing arrangements

for certain of our proprietary formulations in certain non-U.S.

focus of our sales and marketing is in the U.S.

We do, however, believe that our proprietary drug formulations, drug candidates and drug

products could have commercial appeal in international markets, and in the past we have engaged distributors and entered into out-licensing

arrangements for certain of our proprietary formulations in certain non-U.S.

markets, including Canada.

Our sales and marketing efforts are

currently organized into two teams, the larger of which focuses on our ophthalmology pharmaceutical business and the other on

our non-ophthalmology pharmaceutical compounding business.

Our sales and marketing activities consist primarily of efforts to

educate doctors, ambulatory surgery centers, healthcare systems, hospitals and other users throughout the U.S.

about our compounded

formulations.

We expect that we may experience growth in the sales of our proprietary pharmaceutical compounded formulations in

future periods, particularly in light of our current and planned launches of new formulations and commercialization campaigns.

However, we may not be successful in doing so, whether due to the safety, quality or availability of our proprietary compounded

formulations, the size of the markets for such formulations, which could be smaller than we expect, the timing of market entry

relative to competitive products, the availability of alternative compounded formulations or FDA-approved drugs, the price of

our compounded formulations relative to alternative products or the success of our sales and marketing efforts, which is dependent

on our ability to build and grow a qualified and adequate internal sales function.

expect to acquire and/or develop additional FDA-approved ophthalmic drugs that allow us to leverage the commercial infrastructure

Our sales and marketing efforts

are currently organized into two teams, the larger of which focuses on our ophthalmology pharmaceutical business and the other on our

non-ophthalmology pharmaceutical compounding business.

Our sales and marketing activities consist primarily of efforts to educate doctors,

ambulatory surgery centers, healthcare systems, hospitals and other users throughout the U.S.

about our compounded formulations.

that we may experience growth in the sales of our proprietary pharmaceutical compounded formulations in future periods, particularly

in light of our current and planned launches of new formulations and commercialization campaigns.

However, we may not be successful in

doing so, whether due to the safety, quality or availability of our proprietary compounded formulations, the size of the markets for

such formulations, which could be smaller than we expect, the timing of market entry relative to competitive products, the availability

of alternative compounded formulations or FDA-approved drugs, the price of our compounded formulations relative to alternative products

or the success of our sales and marketing efforts, which is dependent on our ability to build and grow a qualified and adequate internal

sales function.

expect to continue to acquire and/or develop additional FDA-approved ophthalmic drugs that allow us to leverage the commercial infrastructure

of ImprimisRx to promote, sell, and ultimately bring these products to market.

As we execute this strategy, we will likely expand

our sales and marketing team, expertise and expenses.

This would include the addition of market access expertise and team members,

where roles include discussions with payors regarding the costs and benefits of our products for their members, assisting with

the addition of our products to the medical policy of payors, and providing the market with assistance regarding reimbursement

As we execute this strategy, we will likely expand our

sales and marketing team, expertise and expenses.

This would include the addition of market access expertise and team members, where

roles include discussions with payors regarding the costs and benefits of our products for their members, assisting with the addition

of our products to the medical policy of payors, and providing the market with assistance regarding reimbursement queries.

have entered into various sales and marketing agreements with certain organizations to provide exclusive sales and marketing representation

services to ImprimisRx in select geographies in the U.S., in connection with our pharmaceutical products and compounded formulations.

Under the terms of the sales and marketing agreements, we are required to make commission payments, generally equal to 10% to

14% of net sales for products above and beyond the initial existing sales amounts.

In addition, we are required to make periodic

milestone payments to certain organizations in shares of our restricted common stock if net sales in the assigned territory reach

certain future levels by the end of their terms, as applicable.

We believe these sales and marketing agreements will continue

to accelerate launches of our new ophthalmology programs and limit our initial capital requirements commonly associated with new

product launches and increased sizes of sales forces.

Under the terms of the sales and marketing agreements, we are required to make commission payments, generally equal to 10% to 14% of

net sales for products above and beyond the initial existing sales amounts.

In addition, we are required to make periodic milestone payments

to certain organizations in shares of our restricted common stock if net sales in the assigned territory reach certain future levels

by the end of their terms, as applicable.

We believe these sales and marketing agreements will continue to accelerate launches of our

new ophthalmology programs and limit our initial capital requirements commonly associated with new product launches and increased sizes

of sales forces.

pharmaceutical and pharmacy industries are highly competitive.

We compete against branded drug companies, generic drug companies,

outsourcing facilities and other compounding pharmacies.

We are significantly smaller than some of our competitors, and we may

lack the financial and other resources needed to develop, produce, distribute, market and commercialize any of our proprietary

formulations or compete for market share in these sectors.

The drug products available through branded and generic drug companies

with which our formulations compete have been approved for marketing and sale by the FDA and are required to be manufactured in

facilities compliant with cGMP standards.

Although we prepare some of our compounded formulations in accordance with cGMP standards

and our other formulations are produced according to the standards provided by United States Pharmacopoeia (USP) <795> and

USP <797> and applicable state and federal law, our proprietary compounded formulations are not required to be, and have

not been, approved for marketing and sale by the FDA.

As a result, some physicians may be unwilling to prescribe, and some patients

may be unwilling to use, our formulations.

Additionally, under federal and state laws applicable to our current compounding pharmacy

operations operating under Section 503A of the FDCA, we are not permitted to prepare significant amounts of a specific formulation

in advance of a prescription, compound quantities for office use or utilize a wholesaler for distribution of our formulations;

instead, our compounded formulations must be prepared and dispensed in connection with a physician prescription for an individually

identified patient.

Pharmaceutical companies, on the other hand, are able to sell their FDA-approved products to large pharmaceutical

wholesalers, who can in turn sell to and supply hospitals and retail pharmacies.

Even though we have registered NJOF with the

FDA, our business may not be scalable on the scope available to our competitors that produce FDA-approved drugs, which may limit

our potential for profitable operations.

These facets of our operations may subject our business to limitations our competitors

offering FDA-approved drugs may not face.

We compete against branded drug companies, generic drug companies, outsourcing

facilities and other compounding pharmacies.

We are significantly smaller than some of our competitors, and we may lack the financial

and other resources needed to develop, produce, distribute, market and commercialize any of our proprietary formulations or compete for

market share in these sectors.

The drug products available through branded and generic drug companies with which our formulations compete

have been approved for marketing and sale by the FDA and are required to be manufactured in facilities compliant with cGMP standards.

Although we prepare some of our compounded formulations in accordance with cGMP standards and our other formulations are produced according

to the standards provided by United States Pharmacopoeia (USP) <795> and USP <797> and applicable state and federal law,

our proprietary compounded formulations are not required to be, and have not been, approved for marketing and sale by the FDA.

some physicians may be unwilling to prescribe, and some patients may be unwilling to use, our formulations.

Additionally, under federal

and state laws applicable to our current compounding pharmacy operations operating under Section 503A of the FDCA, we are not permitted

to prepare significant amounts of a specific formulation in advance of a prescription, compound quantities for office use or utilize

a wholesaler for distribution of our formulations;

instead, our compounded formulations must be prepared and dispensed in connection

with a physician prescription for an individually identified patient.

Pharmaceutical companies, on the other hand, are able to sell their

FDA-approved products to large pharmaceutical wholesalers, who can in turn sell to and supply hospitals and retail pharmacies.

we have registered NJOF with the FDA, our business may not be scalable on the scope available to our competitors that produce FDA-approved

drugs, which may limit our potential for profitable operations.

These facets of our operations may subject our business to limitations

our competitors offering FDA-approved drugs may not face.

Biotechnology

and related pharmaceutical technologies are subject to rapid and significant change.

Our future success will depend in large part

on our ability to maintain a competitive position with respect to these technologies.

Products developed by our competitors, including

FDA-approved drugs and compounded formulations created by other pharmacies, could render our products and technologies obsolete

or unable to compete.

Any products that we develop may become obsolete before we recover expenses incurred in developing the products,

which may require that we seek additional funds that may or may not be available to continue our operations.

The competitive environment

requires an ongoing, extensive search for medical and technological innovations and the ability to develop and market these innovations

effectively, and we may not be competitive with respect to these factors.

Other competitive factors include the safety and efficacy

of a product, the size of the market for a product, the timing of market entry relative to competitive products, the availability

of alternative compounded formulations or approved drugs, the price of a product relative to alternative products, the availability

of third-party reimbursement, the success of sales and marketing efforts, brand recognition and the availability of scientific

and technical information about a product.

Although we believe we are positioned to compete favorably with respect to many of

these factors, if our proprietary formulations are unable to compete with the products of our competitors, we may never gain market

share or achieve profitability.

Our future success will depend in large part on

our ability to maintain a competitive position with respect to these technologies.

Products developed by our competitors, including FDA-approved

drugs and compounded formulations created by other pharmacies, could render our products and technologies obsolete or unable to compete.

Any products that we develop may become obsolete before we recover expenses incurred in developing the products, which may require that

we seek additional funds that may or may not be available to continue our operations.

The competitive environment requires an ongoing,

extensive search for medical and technological innovations and the ability to develop and market these innovations effectively, and we

may not be competitive with respect to these factors.

Other competitive factors include the safety and efficacy of a product, the size

of the market for a product, the timing of market entry relative to competitive products, the availability of alternative compounded

formulations or approved drugs, the price of a product relative to alternative products, the availability of third-party reimbursement,

the success of sales and marketing efforts, brand recognition and the availability of scientific and technical information about a product.

Although we believe we are positioned to compete favorably with respect to many of these factors, if our proprietary formulations are

unable to compete with the products of our competitors, we may never gain market share or achieve profitability.

Affecting Our Performance

believe the primary factors affecting our performance are our ability to increase revenues of our proprietary compounded formulations

and certain non-proprietary products, grow and gain operating efficiencies in our pharmacy operations, optimize pricing and obtain

reimbursement options for our proprietary compounded formulations, and continue to pursue development and commercialization opportunities

for certain of our ophthalmology and other assets that we have not yet made commercially available as compounded formulations.

We believe we have built a tangible and intangible infrastructure that will allow us to scale revenues efficiently in the long-term.

All of these activities will require significant costs and other resources, which we may not have or be able to obtain from operations

or other sources.

and certain non-proprietary products, grow and gain operating efficiencies in our pharmacy operations, potential regulatory-related restrictions,

optimize pricing and obtain reimbursement options for our proprietary compounded formulations, and continue to pursue development and

commercialization opportunities for certain of our ophthalmology and other assets that we have not yet made commercially available as

compounded formulations.

We believe we have built a tangible and intangible infrastructure that will allow us to scale revenues efficiently

in the near and long-term.

All of these activities will require significant costs and other resources, which we may not have or be able

to obtain from operations or other sources.

See “Liquidity and Capital Resources” below.

Reimbursement

Options and Pricing Optimization

is covered under Medicare Part B, and we are developing drug candidates that we believe will be covered under Medicare Part B.

approved by the FDA that are used in surgeries performed in hospital outpatient departments or ambulatory surgical centers may receive

a transitional pass-through reimbursement under Medicare, provided they meet certain criteria, including a “not insignificant”

cost criterion.

Pass-through status allows for separate payment (i.e., outside the packaged payment rate for the surgical procedure)

under Medicare Part B, which consists of Medicare reimbursement for a drug based on a defined formula for calculating the minimum fee

that a manufacturer may charge for the drug.

Under current regulations of the Centers for Medicare & Medicaid Services (“CMS”),

pass-through status applies for a period of three years, measured from the date Medicare makes its first pass-through payment for the

product, following which the product would be incorporated into the cataract bundled payment system, which could significantly reduce

the pricing for that product.

Following expiration of pass-through status, under current CMS policy, non-opioid pain management surgical

drugs when used on Medicare Part B patients in the ASC setting can qualify for ongoing separate payment.

CMS’ current non-opioid

separate payment policy, like other CMS policies, can be changed by CMS through its annual rulemaking and comment process.

that CMS will continue its separate payment policy for non-opioid pain management surgical drugs, which has been in effect since 2019.

are working with outside consultants to potentially gain an extension to the transitional payment system, or to separate the drug payment

from the bundled cataract surgery payment after the three-year transitional payment ends and continue to be reimbursed separately for

a longer period of time, potentially through patent life.

Unless extended, Dexycu transitional pass-through reimbursement status will

expire on December 31, 2022, which will have an adverse impact on our commission revenues from this product.

proprietary ophthalmic compounded formulations are currently primarily available on a cash-pay basis.

However, we work with third-party

insurers, pharmacy benefit managers and buying groups to offer patient-specific customizable compounded formulations at accessible

We may devote time and other resources to seek reimbursement and patient pay opportunities for these and other compounded

formulations, and we have hired pharmacy billers to process certain existing reimbursement opportunities for certain formulations.

However, we may be unsuccessful in achieving these goals, as many third-party payors have imposed significant restrictions on

reimbursement for compounded formulations in recent years.

Moreover, third-party payors, including Medicare, are increasingly

attempting to contain health care costs by limiting coverage and the level of reimbursement for new drugs and by refusing, in

some cases, to provide coverage for uses of approved products for disease indications for which the FDA has not granted labeling

Further, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation

Act of 2010 (collectively, the “Health Care Reform Law”), may have a considerable impact on the existing U.S.

for the delivery and financing of health care and could conceivably have a material effect on our business.

As a result, reimbursement

from Medicare, Medicaid and other third-party payors may never be available for any of our products or, if available, may not

be sufficient to allow us to sell the products on a competitive basis and at desirable price points.

We are communicating with

government and third-payor payors in order to make our formulations available to more patients and at optimized pricing levels.

However, if government and other third-party payors do not provide adequate coverage and reimbursement levels for our formulations,

the market acceptance and opportunity for our formulations may be limited.

Additionally,

we have previously made efforts to receive reimbursement and/or optimize the pricing for some of our currently available pharmaceutical

compounded formulations, including applying for transitional pass-through reimbursement status for one of our formulations.

status allows for separate payment (i.e., outside the bundled payment) under Medicare Part B for new drugs and other medical technologies

that meet well-established criteria specified by federal regulations governing CMS spending.

In September 2020, we were informed

by CMS that our application for pass-through payment was denied for one of our formulations.

Any future efforts to attain optimized

pricing or reimbursement of our other proprietary compounded formulations could fail, which could make our products less attractive

or unavailable to some patients or could reduce our margins.

However, MOXEZA, MAXITROL and IOPIDINE,

are and we expect that other drug candidates we are developing, if approved, will be eligible for reimbursement by third-party payors.

We may devote time and other resources to seek reimbursement and patient pay opportunities for these and other drug products and candidates.

However, we may be unsuccessful in achieving these goals, as many third-party payors have imposed significant challenges for products

to be eligible for reimbursement in recent years.

Moreover, third-party payors, including Medicare, are increasingly attempting to contain

health care costs by limiting coverage and the level of reimbursement for new drugs and, in some cases, by refusing to provide coverage

for uses of approved products for disease indications for which the FDA has not granted labeling approval.

Further, the Patient Protection

and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act of 2010 (collectively, the “Health

Care Reform Law”), may have a considerable impact on the existing U.S.

system for the delivery and financing of health care and

could conceivably have a material adverse effect on our business.

As a result, reimbursement from Medicare, Medicaid and other third-party

payors may never be available for any of our products or, if available, may not be sufficient to allow us to sell the products on a competitive

basis and at desirable price points.

We are communicating with government and third-party payors in order to make our drug products and

candidates available to more patients and at optimized pricing levels.

However, if government and other third-party payors do not provide

adequate coverage and reimbursement levels for our drug products and candidates, the market acceptance and opportunity for them may be

success and ability to compete depends upon our ability to protect our intellectual property.

We conduct a fulsome analysis of

the intellectual property landscape prior to acquiring rights to formulations and filing patent applications.

In addition, as

of March 1, 2021, we owned and/or licensed 105 total issued and pending patent applications, which include 16 U.S.

We conduct a fulsome analysis of the intellectual

property landscape prior to acquiring rights to formulations and filing patent applications.

In addition, as of March 1, 2022,

we owned and/or licensed 117 total issued and pending patent applications, which includes 18 U.S.

issued patents, 11

3 unchanged sentences

patent applications in the U.S.

and pursue patent protection for certain of our formulations in other important international

jurisdictions in the future.

and pursue patent protection for certain of our formulations in other important international jurisdictions

in the future.

of March 1, 2022, we had, on a worldwide basis, 162 issued trademarks, pending trademark and copyright applications, or

registered copyright and/or trademarks including, but not limited to:

Imprimis ® , ImprimisRx ® , Harrow

Health ® , Dropless ® , LessDrops ® , Dropless Cataract Surgery ® , Dropless

Cataract Therapy ® , Dropless Therapy ® , MKO Melt ® , and Simple Drops ® .

We may choose to pursue trademark protection in other jurisdictions for any one or more of these or other marks in the future.

also rely on unpatented trade secrets and know-how and continuing technological innovation in order to develop our formulations,

which we seek to protect, in part, by confidentiality agreements with our employees, consultants, collaborators and others, including

certain service providers.

Imprimis ® , ImprimisRx ® , Harrow Health ® ,

Dropless ® , LessDrops ® , Dropless Cataract Surgery ® , Dropless Cataract Therapy ® ,

Dropless Therapy ® , MKO Melt ® , and Simple Drops ® .

We may choose to pursue trademark protection

in other jurisdictions for any one or more of these or other marks in the future.

also rely on unpatented trade secrets and know-how and continuing technological innovation in order to develop our formulations, which

we seek to protect, in part, by confidentiality agreements with our employees, consultants, collaborators and others, including certain

service providers.

We also have invention or patent assignment agreements with our current employees and certain consultants.

However, our employees and consultants may breach these agreements, and we may not have adequate remedies for any breach, or our

trade secrets may otherwise become known or be independently discovered by competitors.

In addition, inventions relevant to us

could be developed by a person not bound by an invention assignment agreement with us, in which case we may have no rights to

use the applicable invention.

our employees and consultants may breach these agreements, and we may not have adequate remedies for any breach, or our trade secrets

may otherwise become known or be independently discovered by competitors.

In addition, inventions relevant to us could be developed by

a person not bound by an invention assignment agreement with us, in which case we may have no rights to use the applicable invention.

business is subject to federal, state and local laws, regulations, and administrative practices, including, among others:

state and local licensure and registration requirements concerning the operation of pharmacies and the practice of pharmacy;

Health Insurance Portability and Accountability Act (“HIPAA”);

federal, state

and local licensure and registration requirements concerning the operation of pharmacies and the practice of pharmacy;

the Health Insurance

Portability and Accountability Act (“HIPAA”);

the Health Care Reform Law;

statutes and regulations

of the FDA, the U.S.

Federal Trade Commission, the U.S.

statutes and regulations of the FDA, the U.S.

Trade Commission, the U.S.

Drug Enforcement Administration and the U.S.

Consumer Product Safety Commission,

as well as regulations promulgated by comparable state agencies concerning the sale, advertisement and promotion of the products

The regulatory and quality compliance environment for compounded drugs has become significantly more rigorous, complex

and strict since the passage of The Drug Quality and Security Act of 2013.

The complexity of the current state and federal regulatory

environment, as well as the expected continued evolution of state and federal laws governing pharmaceutical compounding, have

and will continue to present potentially significant challenges to our business model and the fulfillment of our mission as a

Below are descriptions of some of the various federal and state laws and regulations which may govern or impact our current

and planned operations.

Consumer Product Safety Commission, as well as regulations promulgated

by comparable state agencies concerning the sale, advertisement and promotion of the products we sell.

The regulatory and quality compliance

environment for compounded drugs has become significantly more rigorous, complex and strict since the passage of The Drug Quality and

Security Act of 2013.

The complexity of the current state and federal regulatory environment, as well as the expected continued evolution

of state and federal laws governing pharmaceutical compounding, have and will continue to present potentially significant challenges

to our business model and the fulfillment of our mission as a company.

Below are descriptions of some of the various federal and state

laws and regulations which may govern or impact our current and planned operations.

New Drug Application Process

discussed in other sections of this Annual Report, we are pursing, and may continue to pursue, alone or with project partners, FDA approval

to market and sell one or more of our formulations through the FDA’s NDA process.

As a condition of approval, the FDA or other

regulatory authorities may require further studies, including Phase 4 post-marketing studies, to provide additional data.

What changed 10-K

Item 1. Business